Letaba Biomass to Energy PDD - MyClimate

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The inquiry proceeds with options 1 and 2 Step 1b: Enforcement of applicable laws and regulations PROJECT DESIGN DOCUMENT FORM (GS-VER-PDD) Voluntary Offset Projects - Version 01 alternatives. Both the alternatives are compliant with applicable laws and regulations. Step 2: Investment Analysis This step is not conducted as the barrier analysis is used as per step 3 below. Step 3: Barrier analysis As per “Tools for the demonstration and assessment of additionality”, the barrier analysis has been carried out for demonstrating the additionality of the project activity. Barriers to project activity must demonstrate following characteristics: (a) Prevent the implementation of this type of proposed project activity; and (b) Do not prevent the implementation of at least one of the alternatives stated above. Background This template shall not be altered. It shall be completed without modifying/adding headings or logo, format or font. page 16 When BioTherm first approached African Realty Trust in about August of 2005 about a possible CDM fuel switch project there was installed capacity of 32 tonnes of steam per hour which was practically double what an efficient plant would need but the mere existence of so much redundant capacity showed that energy efficiency was not in the minds of African Realty Trust or that otherwise the solutions were not being uncovered. It appeared the plant had not been analysed from first principles for energy efficiency and there were several ways in which efficiency could be improved. BioTherm spent considerable time and dedicated highly skilled resources to investigating how the demand of the plant could be dropped so that a fuel switch that unlocks the VER revenue stream could be profitably made. As appears below the interventions are in reality a holistic effort aimed at a fuel switch but implemented in stages. Sub-step 3a. Identify barriers that would prevent the implementation of type of the proposed project activity There are several barriers associated with the use of biomass fuel switching in the fruit juicing industry in South Africa. It is evident from the fact that till now no juicing plant in South Africa has switched to biomass or installed a Vapour Absorption Chiller for cooling purposes. The proposed project activity has to overcome various barriers which are illustrated in the following paragraphs. Barriers due to prevailing practice. • This is the first project of its kind in South Africa. Annex 7 contains a list of similar plants in South Africa, none of which have attempted a similar initiative.
PROJECT DESIGN DOCUMENT FORM (GS-VER-PDD) Voluntary Offset Projects - Version 01 This template shall not be altered. It shall be completed without modifying/adding headings or logo, format or font. page 17 • The coal traditionally used in the boilers has been so used for approximately 48 years (from 1961). Supply is secure and there is no danger that the fuel will run out for many years to come. Counterparties are big entities with substantial balance sheets guaranteeing performance. • The entire fuel supply chain has been fine-tuned using coal over the years. The existing plant at Letaba Estates was designed to burn coal as the primary fuel. Burning alternative fuels involves investment not only in the peel driers and boilers but in a parallel storage, handling and processing systems. • The present project has been in development with the in-principle support of African Realty Trust since September 2005 and the PIN was first submitted the SA DNA in September 2006 . Despite a great many hours spent overcoming various difficulties as detailed below, the Letaba Board only finally saw their way clear to implement the project early in June 2008 after the provisional approval of the Gold Standard Methodology that would make the VERs possible. • It is thus submitted that there is an entrenched reliance on coal not only at Letaba Estates but also in the broader juicing industry in South Africa. Technological Barriers • Coal has a uniform characteristic and calorific value ("CV") while the CV of biomass differs across different types of biomass and origin. The main challenge with biomass is the non-uniform characteristics. Key characteristics are moisture, ash content, calorific value, chemical composition and contaminants. • Moreover, the moisture content of biomass can differ markedly and feed stocks like sawdust are often contaminated with a variety of materials including soil and metallic objects • The risk of technological failure is thus significantly greater for biomass than coal in the local circumstances. Financial and risk barriers • The inability to know what coal and biomass fuel costs will be respectively going several years into the future combined with the inability to hedge these costs especially in the case of biomass makes a meaningful financial comparison impossible. • The biomass market is currently very informal and unsophisticated. Suppliers must be developed and it is very difficult to enter into forward agreements for the supply of biomass as the market is typically a spot market and there is an expectation that wood prices will continue to rise. • Counterparties typically do not possess balance sheets comparable to that of coal suppliers, leading to increased risk. • Against these challenges, decisions with far-reaching financial implications need to be made, as detailed below. These decisions would not need to be made if fossil fuels remained to exclusive source of energy at the plant. • The fuel substitution programme at Letaba Estates has required significant sunken costs. In the thirty months of project development, BioTherm Energy has spent an estimated 1 500 person hours on the project, all at risk. This included: o between 8 and 10 site visits spaced over 30 months with concomitant travelling and accommodations costs (400 kilometres one way by road each time); o detailed design of technical solutions; o an entire week in the area doing GPS fuel mapping and negotiating with potential fuel suppliers; o Writing nineteen different versions of the PDD that were occasioned inter alia by changes in CDM rules, changes in the calculation of methane avoidance from waste dumps (this aspect of the project was subsequently abandoned), new versions of methodologies, changes in the cap on small-scale CDM activities, a ruling by the Small Scale Working Group that the applied CDM methodology shall not longer be used for fuel switching to biomass and by efforts to restructure the project so it could remain viable given the changes in projected carbon revenue;
Page 1 and 2: THE GOLD STANDARD: Project Design D
Page 3 and 4: SECTION A. General description of p
Page 5 and 6: PROJECT DESIGN DOCUMENT FORM (GS-VE
Page 9 and 10: SECTION B. Application of a baselin
Page 11 and 12: purposes (i.e. agriculture), and no
Page 15: PROJECT DESIGN DOCUMENT FORM (GS-VE
Page 21 and 22: SECTION D. Application of a monitor
Page 23 and 24: Sustainable Development Indicator D
Page 25 and 26: 11 Load factor of cooling rooms/VAC
Page 31 and 32: SECTION E. Estimation of GHG emissi
Page 33 and 34: Year Estimation of Project Activity
Page 37 and 38: Organization: African Realty Trust
Page 41 and 42: Single strength % = 2 810 / (22 554
Page 43 and 44: This is described in section D abov
Page 45 and 46: comparing the concentration of most
Page 47 and 48: foreign currency savings may result
Page 49 and 50: Not applicable 13. Will the effect
Page 51 and 52: 6. Are there any areas on or around
Page 53 and 54: 21. Are there any areas on or aroun
Page 55 and 56: Annex 8 Calculation of the Grid Emi

Letaba Biomass to Energy PDD - MyClimate

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